If the wealth of the country constitutes the loanable fund, it is possible to make this wealth fruitful only by converting it into currency and making it flowable, or liquid. We know that a stagnant pool will not irrigate land. We know that it must be made to flow along innumerable channels. The pool of water is as unfructifying as fixed or stagnant capital. In order to make fixed capital flow and enrich the area through which it passes it must be re-converted into its original substance, currency. Fixed capital is rigid currency, as ice is rigid water. It is frozen. Well, the banks merely unfreeze it, or thaw it. It is a misuse of language and terms to describe this thawing process as a creation of credit. Now the Government does the same thing when it issues its war loan. It unfreezes fixed capital; it starts into fruitful circulation hoarded capital. A similar effect follows other loans and other promotions. The Bank of England does precisely the same thing when it unfreezes gold direct from the mines by giving notes for it. The gold is fixed, or rigid, frozen capital. It is useless for fructifying purposes of a certain character, and in order to make it fructiferous, or fruitful, it has to be submitted to the reconversion process. When it has gone through this process it is able to perform exactly the same functions, or the same services, as the conversion of other wealth into currency by the banks. How is it that in one case the Bank of England is said not to create credit, and in the other case the banks create credit, when the two processes are identical? Because, we say, the Bank of England gives legal tender currency for the gold, and the banks give only custom currency for the wealth. The one is not exactly a loan, it is argued, but the other is. If gold were a commodity, just ordinary wealth, would it be a loan then? The answer is that gold is not a commodity. But we know that gold is a commodity until it has been minted into sovereigns. As an ordinary export and import it is a commodity. But, the answer comes, the notes are legal tender and legal tender is not credit. Here comes in the schism, the casuistry. Fundamentally, the argument is this. The conversion of wealth into ordinary money or currency is credit, the conversion of wealth into legal tender is not credit. As the banks lend, therefore, something over and beyond the exact amount of legal tender they possess, they create credit. If they lend only the sum equal to their legal tender they do not create credit. Therefore, credit is a something not inherent in legal tender.